Volkswagen eyes Taiwan for auto production plant

INCENTIVES:：Government officials have signaled
their willingness to help the German automaker by offering preferential taxes and land development aid

By Camaron Kao / Staff reporter

Fri, Feb 08, 2013 - Page 13

Beldare Motors (標達國際汽車), the exclusive distributor of Volkswagen in Taiwan, yesterday confirmed that the German automaker was considering building a production line in Taiwan to manufacture 20,000 cars a year by 2015.

“This investment is part of Beldare’s plan to increase its market share to 15 percent of the local car market,” Beldare public relations manager Nelly Liao (廖英瑛) said by telephone.

Liao said Volkswagen has already captured 16 percent of China’s market and the company aims to become the world’s largest car manufacturer by 2018.

The company is also considering manufacturing cars in Taiwan to expand its domestic presence, Liao said.

Liao’s remark came after local media reported on Wednesday that Su Weiming (蘇偉銘), president of Volkswagen’s Greater China and Southeast Asian operations, talked about the company’s investment plan during a meeting with Minister Without Portfolio Yang Chiu-hsing (楊秋興), Vice Minister of Economic Affairs Woody Duh (杜紫軍) and Industrial Development Bureau Director-General Shen Jung-chin (沈榮津) earlier this month.

Su reportedly asked the government to provide preferential tariff treatment and assistance in acquiring land, with the company needing a 165,000m2 plot in the initial phase for the assembly of 50,000 cars per year.

Shen yesterday said the bureau would help Volkswagen if it decides to build a plant in Taiwan and asks for investment incentives.

“We welcome foreign firms to invest in Taiwan and will definitely provide as many incentives as we can offer to attract more firms to invest in the country and help create jobs,” Shen said by telephone.

Shen said the Cabinet’s Invest-in-Taiwan Service Center had helped many foreign companies invest in Taiwan by providing them with a relatively low corporate income tax rate meeting their land development requirements.

Liao said Volkswagen plans to produce the Sharan, a seven-seater multipurpose vehicle, and the Passat, a large family car, in Taiwan.

The company is likely to expand its capacity to produce 100,000 cars a year after 2015, if it receives a positive reaction from customers and acquires an additional 330,000m2 of land.

For the whole of last year, Beldare, the No. 7 car distributor in Taiwan, sold 13,596 Volkswagen vehicles, up 8.8 percent from 2011 and accounting for 3.7 percent of the total market of 365,871 cars, government data showed.

If Beldare could sell all 20,000 cars it produces locally in a year, its market share would increase to about 9 percent and it would become the fourth-largest car distributor in the nation.

The New Taipei City (新北市) government and several local governments in the south have welcomed Volkswagen’s planned investment, Liao said. However, the final decision will depend on the terms that the government offers, he said.

Volkswagen is still negotiating with the government on lower tariffs for auto parts imports, as well as rent, water and electricity rates, Liao said.